China proposes rules to regulate operations in private pensions through investment funds


The securities regulator China proposed rules to regulate the investment in private pensions through investment funds, establishing the criteria for qualified products and sales agents, within the framework of a plan that will channel new savings in the country’s capital markets.

The draft standards, published by the China Securities Regulatory Commission (CSRC) late on Friday, comes after Beijing launched a private pension plan in April that will mark a milestone in meeting the challenges of an aging population.

Under this plan, eligible Chinese citizens will be able to access mutual funds, savings deposits and insurance products through their own individual pension accounts, potentially boosting a pension market that has attracted foreign asset managers such as Fidelity International Y black rock.

The proposed rules “have set a relatively high bar for products and institutions, and are designed to ensure the safety of pension fund investments and protect the interests of investors,” said the China Securities Regulatory Commission in a statement on its website.

Initially, pension funds with at least 50 million yuan ($7.48 million) in assets in the past four quarters are eligible for the pilot pension scheme, the CSRC said.

Other retail funds with clear investment strategies and good long-term track records will gradually be added to the eligibility list as the plan expands, the CSRC said.

Currently, there are 91 pension funds that meet the criteria of the China Securities Regulatory Commissionaccording to TF Securities.

In addition, fund managers and sales agents involved in the private pension business must establish internal control systems, adopt long-term incentives and ensure independent operation of pension assets, according to the rules.

Independent consultants estimate that the market for private pensions of China it will grow to reach at least 1.7 trillion dollars in 2025, from 300,000 million today.

Within 20 years, 28% of China’s population will be over 60, up from 10% today, making it one of the world’s fastest-aging populations, according to the World Health Organization.

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